The Potential UPS Strike Is Evidence Of Labor's Growing Confidence

It’s said that the strongest protection for any worker is not his/her membership in a union or protectionist government regulation, but a growing economy that makes his/her threat to quit credible. Regardless of your feelings on “trickle down” and other related economic theories that are derived from that statement, it’s all about to be put to the test.

Earlier this week, the Teamsters announced that its members voted overwhelmingly in favor of striking UPS. If they can't get a deal done before the current labor contract expires on August 1, Big Brown’s drivers will be headed (hopefully) for cooler climes.

Although UPS and Teamster leadership have reached agreements on a number of non-economic concerns, they haven't made any progress on the most basic. In fact, the Teamsters remain a house divided on a UPS-proposed two-tier wage system, so there's a little bit of "who's on first" going on at the moment, which is not a good thing for anyone.

At issue is a proposal that would make part-time workers full-time, but at their current/same $15 an hour wage. A great deal for UPS, as its existing full-time drivers earn an average of $36 an hour. UPS Teamsters United, positioned as the “opposition group,” argues that the company’s $5 billion profit (posted in 2017), is more than adequate to fund a more reasonable, if not equivalent arrangement for the part-timers. However, a large cross-section of the company's full-time corp don't see it the same way. They don't like the "zero sum" thread that has been woven into these negotiations. Not unlike longer-term professional athletes who insisted on capping rookie contracts, UPS's experienced corp does not want to support a better arrangement for part-timers at its own expense --especially when the company is making record profits.

And there’s more to it. UPS is changing its operating model. "Most people understand in the world of Amazon (AMZN) and e-commerce, UPS isn't going to be Monday to Friday or even Monday to Saturday any more, it's going to be a seven-day operation," said David Levin, a spokesman for UPS Teamsters United.

As suggested by the New York Times, "has Trump's more hands-off [labor] approach unleashed the 'animal spirits' of companies that had hoarded cash after the recession of 2008[?]." In other words, is it possible that UPS has grown a bit greedy? Or, is it just as possible that our bustling economy has helped UPS drivers finally feel their collective oats? UPS employs 260,000 Teamsters. UPS shipments account for an estimated 6% of the U.S. GDP. That means, an unresolved labor dispute could disrupt the nation’s economy. To be clear, this would be the largest strike in recent U.S. history. There's a lot at stake here.

The uncertainty that plagued labor under the Obama administration has already given-way to a renewed confidence. It's undeniable. Full employment tends to have that effect. These will be interesting negotiations to watch, as Teamster negotiators haven't exactly been knocking it out of the park of late. But with UPS recording more than $5 billion in 2017 profits, it's hard to imagine that labor, especially in this case, would be required to make any concessions.